TaxTMI 
TaxTMI 
CHEQUE RETURN PENALTY SERVICE TAX
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....HEQUE RETURN PENALTY SERVICE TAX<br> Query (Issue) Started By: - george thomas Dated:- 11-2-2016 Last Reply Date:- 14-2-2016 Service Tax<br>Got 6 Replies<br>Service Tax<br>Dear Sir Our Company is engaged in Trading of Edible oil by appointing CFA OR Trade Associate .After the sales we are receiving Cheque payments .As per the Agreement if cheque is bounced more than 2 times we have the right to c....
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....ollect cheque return penalty charges also along with the invoice amount. Plz clarify whether service tax liability is there for the Cheque Return Penalty charges collected from the party.This charges is a part of the sale invoice amount and not providing any service Reply By Ganeshan Kalyani: The Reply: Service tax is not applicable on penalty as it does not amounts to service. Reply By KASTURI S....
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....ETHI: The Reply: You have yourself said that penalty charges collected are part of sale invoice.Hence no question of applicability of ST. No service has been provided. Agreed with Sh.Ganeshan Kalyani ji. Reply By YAGAY AND SUN: The Reply: According to us Section 66 E (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; would be applicable....
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.... on this transaction. Reply By KASTURI SETHI: The Reply: M/s. YAGAY AND SUN, Dear Sirs, With due respect, I differ with you on this issue. In this case, penalty charges recovered due to bouncing of cheque pertain to sale of edible oil and not to providing taxable service. CFA is not in picture. Had the penalty charges pertained to taxable service, Section 66 (E)(e) would have been applicable. ....
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.... This is my view and views of other experts are also solicited. Reply By Ganeshan Kalyani: The Reply: The subject under issue is very debatable. I remember in recent past issue there had been a strong discussion on the subject. However that issue issue is slightly different from this one. Thanks. Reply By KASTURI SETHI: The Reply: Difference of opinion does not mean lack of knowledge. Difference....
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.... of opinion leads to healthy discussion and thus, in turn, healthy discussion yields more knowledge and clarity on the issue. So every discussion should not remain inconclusive.<br> Discussion Forum - Knowledge Sharing ....